Title
Intergovernmental Agreement between State of Arizona and City of Phoenix for Paradise Ridge Flood Control Improvement Funding and Reimbursement (Ordinance S-46460)
Description
Request to authorize the City Manager, or his designee, to enter into an Intergovernmental Agreement (IGA) with the Arizona State Land Department (ASLD) to provide construction of a storm drainage facility project in the vicinity of Paradise Ridge, which is an approximately 5,000-acre parcel located on the northwest corner of 56th Street and the Loop 101 Freeway. Approval of this item will allow for development of a strategically valuable parcel from an economic development perspective. Further request authorization for the City Treasurer to accept, and for the City Controller to disburse, all funds related to this item. This file is a companion case and will be heard consecutively with: Intergovernmental Agreements with Flood Control District of Maricopa County for Paradise Ridge Flood Control Project under Capital Improvement Projects Prioritization Process.
Report
Summary
The City is currently participating in the Rawhide Wash Flood Hazard Mitigation Project (RWFHMP), a joint effort with the Flood Control District of Maricopa County (FCDMC) and the City of Scottsdale (COS) to design and construct flood control improvements that will contain a Federal Emergency Management Agency (FEMA) special flood hazard delineated floodplain that currently impacts land in Scottsdale and Phoenix.
The proposed Paradise Ridge Flood Control Project (PRFCP) represents a specific segment of the RWFHMP that is wholly within Phoenix city limits, and would involve a joint effort of the City, the FCDMC, and ASLD. Under the proposed arrangement, FCDMC would manage the project and contribute half of the required funds necessary for design and construction. ASLD would advance funds up to $19 million to cover the remaining costs for design and construction, and ensure the required land is made available for the flood control facilities. The City would collect the Paradise Ridge Storm Drainage Impact Fee that was recently approved by City Council to reimburse ASLD as the benefitting lands develop, which are all ASLD owned lands. Upon completion of the project, the City would maintain the flood control facilities.
Proposed Paradise Ridge Flood Control Project IGA with ASLD Deal Points
- ASLD will advance funds up to a maximum of $19 million towards the design and construction of the project, which will be used by the City to match the funding contribution of the FCDMC. The most recent estimate provided by the FCDMC’s design concept report indicates that the City’s share of the project would be $16 million but this is a preliminary estimate and actual costs could be higher or lower.
- ASLD will ensure that land is made available for construction of the project by attaching that right-of-way (ROW) to the future sale of the parcel and requiring the successful purchaser to then transfer that land to the FCDMC. That land would eventually be transferred to the City, to allow it to meet its obligation to maintain the project once constructed.
- After the project is completed, the City will collect impact fees through the recently-adopted Paradise Ridge Storm Drainage Impact Fee and then transfer to ASLD on an annual basis the proceeds of the fees collected. Only drainage impact fees will be used to repay ASLD, and the rate of repayment will depend entirely on ASLD’s sale of land in the benefitting area and subsequent pulling of permits and paying of drainage impact fees.
- Once the full actual cost of design and construction is known, the City will review, and if necessary revise, the Paradise Ridge Storm Drainage Impact Fee to ensure that adequate amounts are collected to reimburse ASLD.
- To compensate ASLD for the opportunity cost of contributing its funds, the drainage impact fee will include a 1.9 percent charge on outstanding principal balances that will be calculated once a year. The City will periodically estimate the total cost of repaying ASLD, with the additional charge, and if necessary revise the drainage impact fee to ensure adequate funds are collected.
- If the City’s anticipated share of design and construction costs exceeds the $19 million that ASLD will provide, the City has the option of adding $2 million in additional funds that would be repaid from future Paradise Ridge Storm Drainage Impact Fees. If the City provides additional funding, the City would be repaid from available drainage fees before ASLD is repaid from the same source.
Financial Impact
The City’s financial impact is expressly limited to storm drainage impact fees collected in the Paradise Ridge Impact Fee Area. The City’s obligation to make reimbursement payments to the ASLD is dependent upon the availability of impact fee revenue. There is no maturity date or scheduled amortization on the reimbursement, and no recourse to require reimbursement from other City revenue sources. Approval of this item will not cost the General Fund money and if awarded the matching funds from the Maricopa County Flood Control District alleviate a significant barrier to developing this strategically located parcel for future economic development.
Concurrence/Previous Council Action
This item was recommended for approval at the Transportation, Infrastructure and Innovation Subcommittee meeting on March 4, 2020 by a vote of 4-0.
Location
Desert View Village - generally east of 64th Street between the Central Arizona Project Canal and Pinnacle Peak Road.
Council District: 2 and Out of City
Department
Responsible Department
This item is submitted by Deputy City Managers Karen Peters and Mario Paniagua, and the Planning and Development, Street Transportation and Public Works departments.